Legend, literature and history have painted this spirited island nation as one of the Far East's forbidden cities. Right out of the pages of Joseph Conrad or Somerset Maugham, this was a city where opium use was rampant, all manner of vice was available for a price, and Noel Coward's mad dogs and Englishmen went out in the noonday sun. Following the island's independence from Great Britain in the 1950s, city fathers began to sanitize the place.

A Cabinet-level committee has recommended that President Reagan withdraw special trade privileges enjoyed by four fast-growing Asian nations whose soaring trade surpluses with the United States have created a serious economic challenge to the Administration. Sources said the President is expected to approve the decision of the White House Economic Policy Council, which could be announced as early as Saturday and would take effect next January.